Economy of Zaire
Blessed with vast reserves of minerals, including 10-15% of the world's copper, 1/4 of its diamonds, 70% of its cobalt, nearly all of its coltan, the potential capacity to generate 13% of the world's electricity, huge tracts of agriculturally productive land, and large reserves of gold, manganese, tin, zinc, niobium, and tantalum, in addition to abundant petroleum and timber, Zaire is nevertheless one of the world's poorest countries. Years of rampant corruption, stifling economic controls, and instability have hindered growth. Once self-sufficient in food production, the country today must import large quantities of food to feed its people. Zaire's poor economic performance has had a severe impact on the populace's standard of living. Even in years of modest GDP growth, economic growth is outpaced by the nation's very high population growth rate, which has been estimated at over 3 percent per year. As a result, per capita GDP has often fallen, or risen only slightly, even in years of improved economic performance. In terms of per capita GDP, mineral-rich Zaire finds itself among the desperately poor African nations. Nevertheless, although living conditions and purchasing power for the average peasant and city dweller are indeed meager, and for many people desperately low, official estimates of per capita income indicate a much lower standard of living than has actually been the case, especially prior to 1992. Many Zairians eke out a living through subsistence agriculture and barter and informal trade in a range of goods and services that show up nowhere in official government or donor country statistics. This energetic informal economy is often described by the apocryphal article fifteen of the first postindependence constitution, "fend for yourself." Mobutu's efforts to centralize state power in his hands in order to penetrate all aspects of society have been analyzed by Thomas Callaghy, who has demonstrated that in the economic realm these efforts met with catastrophic results. When Mobutu came to power, Zaire began major state expansion and consolidation. Key to this process was the notion of economic sovereignty. Furthermore, Mobutu sought to bring economic activity within his tight control and was especially concerned with mining activity in the secessionist Shaba and Kasai (present-day Kasai-Oriental and KasaiOccidental ) regions. Some have speculated that insecurity about Shaba separatism in part led Mobutu to construct the country's primary source of electricity, the Inga I and Inga II hydroelectric plants, west of Kinshasa, in order to increase the capital's control over Shaba. Mobutu sought to reverse the traditional dominance of the mining region over the rest of the nation. The nationalization of the Belgian-owned UMHK in 1967 and its transformation into the Zairian-owned parastatal Gécamines, for example, was both a political and an economic act, deliberately and carefully planned. Its primary objective was the consolidation of presidential authority and spending ability. To finance state goals, Mobutu had to acquire major new financial resources for development projects and for slush money. The government became increasingly preoccupied throughout the 1970s with raising revenue to finance grandiose projects. The practice of patrimonialism gave free rein to the enrichment of the president and his associates in government and other spheres. According to Callaghy, "the revenue needs of the state intersected the need of the regime to finance its patrimonial processes of power maintenance and the ambition of the emergent political class for a swift accumulation of wealth." These needs and ambitions led to a continuing financial crisis. Government administration developed weak, inefficient, and infamously corrupt financial structures; the revenue collection system, in particular, was little more than an open invitation for personal enrichment by favored administrators. Mobutu, as the patron of patrons, demonstrated a voracious desire for more revenue to spend as he saw fit. Much of this spending was untraceable, according to foreign technocrats brought in to salvage the economy as its crisis deepened. The expense of this quest for power and glory, and the costs of defense, grandiose projects, and a lavish life-style as well as the corruption and largesse inherent in a patriarchal patrimonial regime also brought the Zairian state to the point of collapse in the late 1970s. In Zaire, corruption appeared to be the norm, not just an occasional or problematic exception. Access to high office was controlled by the president. Because no one could be sure of remaining in office for very long, the incentive was to profit as quickly and as much as possible. Access to high office was the only hope of the Zairian elite or would-be-elite to attain, or maintain, a decent standard of living. The system guaranteed that top functionaries would serve the president, the ultimate source of their livelihood, rather than the nation. But corruption in Zaire was economically dysfunctional. Corruption did not serve to grease the wheels of the economic machine by creating jobs or other forms of expansion. Unfortunately for millions of Zairians as well as for frustrated foreign donors, the system was incapable of promoting sustained development. Nonetheless, to the extent that this system had enriched the president and kept him in firm control of a disparate society, it had worked well, and Mobutu appeared unlikely to abandon it, even under the heavy internal and external pressures he faced in the early 1990s. Until the economic reforms begun under IMF tutelage in 1983, the government controlled economic policy by heavy participation in and ownership of enterprises, particularly those in the mining sector. Gécamines, the giant mining company, was a wholly government-owned company. These parastatals, until the reforms of 1983, were characteristically inefficient, largely because of their use by government elites as sources of private enrichment. One of the most notorious offenders was the mineral marketing agency, the Zairian Commerce Company (Société Zaïroise de Commercialisation des Minérais, or Sozacom). Prior to its dissolution in 1984, Sozacom was under constant government pressure to surrender its export receipts to the treasury rather than to Gécamines for reinvestment, and it also had a reputation for diverting a percentage of its receipts to members of the Zairian elite. Although by the early 1990s the government still owned or held a majority interest in many enterprises, including the national railroad and airlines, major mining and petroleum companies, and utilities, in theory the private sector was expected to lead economic growth. World Bank and IMF lending has been predicated on privatization and reform of state enterprises, allowing them to be run by competent managers free of political pressure from the central government. But reform was and remains very unlikely under the Mobutu regime. As a result of economic malaise, many people are forced to resort to petty crime just to get by. Bribery and corruption are not just prevalent among the top echelons of the government, but among every layer of society, from the bottom up. Corruption is extremely widespread. A survey of government personnel in Lubumbashi in 1982 documented the variety of means by which state employees supplemented their irregular and inadequate salaries. These means included embezzlement (including direct payroll theft, often through the padding of payrolls with fictitious names), payoffs, forgeries of official signatures and seals, sale of false documents of certification, illegal taxation, second jobs, and foodstuff production and sale. Other analysts have added to the above false bills and profit-margin cheating on the allowed rate of profit for business; import, export, and excise stamp fraud; sale of merchandise quotas; postal and judicial fraud; and extortion at military barricades. Bribery, too, is commonplace. A rich vocabulary for bribes is one index of its ubiquity. Anthropologist Janet MacGaffey has cited as examples in Lingala, madesu ya bana (beans for the children) and tia ngai mbeli (stab me); in Swahili, kuposa koo (refresh the throat) and kulowanish a ndebu (moisten the beard); and in French, comprendre, s'arranger, and coopérer (to understand, to come to terms, and to cooperate), which may be used by a speaker to indicate that a bribe is appropriate. Sometimes a gesture may be used, such as stroking under the chin, to signal that a bribe is expected. Although analysts debate whether the term bribery is an appropriate characterization of these exchanges, the scale of the phenomenon and the bottom-to-top direction of the flow of resources has not been contested. The state of Zaire's economy today is truly dismal. 70 to 75% of the population lives below the poverty line, and of those, most live in extreme poverty. Unemployment in the capital, Kinshasa, is 40%, and as high as 85% elsewhere (except in the mining regions, where unemployment is substantially lower). Industry operates at only 25% of capacity. There is a tax base of less than one million people, or just 1/60 of the total population. Note: The bulk of this article comes from Zaire: A Country Study, which is in the public domain. Category:Economy of Zaire